The company is still feeling the effects on its top line of the resulting mass-password reset, Chief Financial Officer John Bax said in an interview Friday, explaining the confluence of forces that shaped LivingSocial's financial results in the first quarter.

The numbers — $177 million in net income, $77 million in revenue — are a snapshot of a company that is at the same time contracting, growing and, it hopes, recovering. That $177 million owes more to accounting rules than any real reflection of profitability; LivingSocial recorded a $205 million "gain on disposal" stemming from its sale of Ticket Monster, its South Korean subsidiary, to competitor Groupon Inc. The acquisition closed in January. So, for practical purposes, LivingSocial is not in the black.

Revenue during the first quarter slipped from $108 million in the same period of 2013, not only due to ongoing fallout from the hack, Bax said, but also other " rationalization of the business." That includes the closure of its 918 F St. NW events space and broader shift away from self-produced events, as well as a reorganization of the sales staff under Chief Revenue Officer Doug Miller. The company finds itself at a point where it's paring back old initiatives while new ones haven't started producing revenue.

Operating expenses fell as well, to $98 million in Q1 2014 from $107 million in Q1 2013.

LivingSocial, following the cuts, is now looking to focus on its role as a marketing platform, hoping to appeal to a broader population of merchants than it did with its once-core daily deal product.

The company has sought to expand the so-called category of "merchant solutions" for years, with a number of false-starts. Now, it's pouring resources into the effort, having hired 25 engineers in recent months to work solely on the new platform. The project is internally being referred to as "Glue," Bax said, so named because it aims "to make the customer stickier" for merchants. That is: it's geared toward encouraging loyalty and repeat business.

Part of that effort revolves around making Glue more flexible than the standard 50 percent off, time-limited paper-based coupon that we think of as the daily deal, a product that attracted criticism for sending mobs of deal-chasers in the door at inopportune times. "Basically, we are trying to alleviate every one of those concerns," Bax said.

Under the new model, for example, restaurants could "turn their deals on and off," with selective blackouts for, say, Friday and Saturday night, when business is already strong.

"Fixing all those objections to why you wouldn't run a deal is what we're working on," said Bax.